HINDUSTAN AERONAUTICS LTD Vs. MUNISWAMY REDDY

JUDGEMENT

(1.) Both these appeals are by the Hindustan Aeronautics Limited, Bangalore for whose benefit the land in question was acquired. There is no dispute that the land was occupied by the Hindustan Air Crafts Limited in the year 1943 and eversince then either the said Hindustan Air Crafts Limited or its successor the present appellant has been in possession continuously. There is also no dispute that the owner-respondent No. 1 was not in possession of any portion of this land and no rent or licence fee was being paid for this occupation. On 4/06/1981, preliminary notification was published under Section 4(1) of the Land Acquisition Act, 1894 ('the Act') proposing to acquire the land for the benefit of H.A.L. In November, 1981 final notification under Section 6 was issued. On 24-3-1982, the Land Acquisition Officer made his award granting compensation at the rate of Rs. 40,000/- per Acre. This was enhanced by the reference Court in LAC No. 207/1982 on 8/08/1984. The enhanced compensation was at the rate of Rs. 1,25,500/- per Acre. The City Civil Court also ordered interest at 5% payable on the compensation with effect from 15/09/1943, the date on which possession was taken from the owner by the HAL and 5% was also ordered under the amended provisions of the Act. In these appeals two questions are raised by Mr. Narayana Rao, learned Senior Counsel appearing for the appellant.

(2.) The law is quite clear, as on to-day, and we do not think we can accept any of these submissions. Section 28 of the Act which provides for a direction regarding interest states that interest may be awarded from the date on which possession is taken from the owner by the collector. The provision is quite clear. The contention of the learned counsel assumes that compensation is awarded with reference to the market value prevailing on the date of the preliminary notification and therefore any award of interest on the said amount for a period prior to the said date is inequitable and not called for and that the owner is compensated for an amount which is not due to him.

(3.) This contention overlooks the concept of interest payable under the Act. It has been clarified judicially now that interest is payable to the owner in consideration of his right to possession which he is deprived of when possession is taken from him. The interest payable has nothing to do with the concept of compensation payable to the claimant though interest is computed with reference to the said compensation. In Satinder Singh v. Umrao Singh, AIR 1961 SC 908, the question was considered by the Supreme Court, at p. 915, as follows : "Stated broadly the act of taking possession of immovable property generally implies an agreement to pay interest on the value of the property and it is on this principle that a claim for interest is made against the State. This question has been considered on several occasions and the general principle on which the contention is raised by the claimants has been upheld. In Swift v. C.V. Board of Trade (1925) AC 520 at p. 532, it has been held by the House of Lords that